AOL eyeing new search deal

RANCHO PALOS VERDES, Calif.--AOL CEO Tim Armstrong said on Thursday that the company has started the process of meeting with Google and others over who will power the site's search engine going forward.

The company's current deal with Google is set to expire and Armstrong said AOL has spent the last six months evaluating what it needs out of the next search deal and has begun to meet with potential partners, presumably Google and Microsoft.

He didn't go into specifics, but said the company is focused on the longer-term economics of the deal. "I don't know whether there will be an upfront payment," he said, speaking at the D: All Things Digital conference here.

He also positioned AOL's search business as even more valuable than just its few points of market share, trying to position AOL's searchers as more valuable and engaged.

Armstrong said the company also sees a lot of value in the AOL brand, even if those in the tech industry tend to see it as one in decline. Armstrong said AOL has a "warm fuzzy feeling" in the broad consumer market as "the brand that put people online."

A lot of the work, Armstrong said, is about changing the company's culture, which he said was more like a bunch of individuals playing their own golf game as opposed to a team united against a tough opponent.

Part of the reason the company did a voluntary separation program as opposed to layoffs, he said, was to try to make the company filled with people who are ready to work hard.

"Turning this company around is not going to be easy," he said. "It is not going to be eight hour days. The culture is about 60 percent of the way to where I hope it will be one day."

Asked about AOL's future, Armstrong pointed to Warren Buffet's analogy that companies are like cigars. At a minimum, Armstrong said AOL has a few good puffs left. However, he said he is focused on making sure the company can actually crank out new cigars.